Homework SourseAt what effective rate of interest will be present value of
At what effective rate of interest will be present value of $1,000 at the end of 2 years and $3,000 at the end of 4 years be equal to $10,000?
Solution
Use IRR funciton in Excel
effective rate of interest = -22.54%
| Cash flows | Year |
| (10,000.000) | 0 |
| - | 1 |
| 1,000.000 | 2 |
| - | 3 |
| 3,000.000 | 4 |
